China, India rising, but face bumpy ride: forecast!

WASHINGTON -- A new US intelligence forecast identifies China and India as rising heavyweights in a coming multi-polar world but says both face a potentially bumpy ride to the top.

"Although we believe chances are good that China and India will continue to rise, their ascent is not guaranteed and will require overcoming high economic and social hurdles," the report by the US National Intelligence Council said.

Titled "Global Trends 2025 -- A World Transformed," the 121-page report was released Thursday to stimulate debate and thinking as a new US administration prepares to take power.

It warned that US security and economic interests could face new challenges if China becomes a peer competitor with a strong military and a dynamic, energy-hungry economy.

"Few countries are poised to have more impact on the world over the next 15-20 years than China," the report said.

"If current trends persist, by 2025 China will have the world's second largest economy and will be a leading military power," it added.

"It could also be the largest importer of natural resources and an even greater polluter than it is now."

But it said China's economic growth will certainly slow, or even recede.

Mounting social pressures arising from growing income disparities, a fraying social safety net, poor business regulation, hunger for foreign energy, enduring corruption, and environmental devastation also lie in its future.

"Any of these problems might be soluble in isolation, but the country could be hit by a 'perfect storm' if many of them demand attention at the same time," the report said.

The report said India will probably continue to enjoy relatively rapid economic growth, but the growing gap between rich and poor will become a more acute political issue.

"Indian leaders do not see Washington as a military or economic patron and now believe the international situation has made such a benefactor unnecessary," the report said.

"New Delhi will, however, pursue the benefits of favorable US ties, partly, too, as a hedge against any development of hostile ties with China," it said.

In a discussion about Japan, the report said its policies in the future will be shaped by those of China and the United States.

It said Tokyo would stay close to Washington whether it developed closer economic ties with Beijing or faced a hostile China.

But if the US security commitment to Japan weakened or if Washington moved significantly closer to Beijing, Tokyo would move closer to China.

The report also identified three potential up and coming powers, all from the Muslim world but not from its Arab core. They are Indonesia, Turkey and Iran.

Political and economic reform in Iran, along with a stable investment climate, "could fundamentally redraw both the way the world perceives the country and also the way in which Iranians view themselves."

"Under those circumstances, economic resurgence could take place quickly in Iran and embolden a latent cosmopolitan, educated, at times secular Iranian middle class," it said.